ITR filing: How to make the best investment, late tax penalty and other things you need to know

ITR filing: How to make the best investment, late tax penalty and other things you need to know

Many of you have already submitted your investment proof to your employer to save some tax. And if you did not, you are advised to do it as soon as possible. However, if you are one of those first-timers who are confused about everything or forgot to file the income tax returns (ITR) or still contemplating on how to make most of the tax investment tools then let us help you out.

Zee Media’s Akash Sinha in an exclusive chat with author and Sebi registered investment advisor Jitendra Solanki discussed some popular FAQs to sort out the confusion. Below are the edited excerpts.

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How taxpayers can make most of the tax investment tools?

Jitendra Solanki: First of all you need to see what all different options available for the taxpayers, we have 80 C then 80 D for health insuranceand then the option of NPS for further additional deduction. But before making the most of these tools, individuals need to figure out their requirement. They need to do a proper tax planning to see what are the options that will work best for them.

For example, if a salaried individual already has the employee provident fund (RPF), then he’s automatically covered under the 80 C benefit.

If a salaried individual has children then their tution fee is also comes under 80C benefit. But if he needs to avail more benefits he needs to go beyond the 80 C benefit.

After 80 C you have, 80 D where you can claim for your parents health also. Then you have NPS to avail additional advantage.

What are the biggest tax changes that tax payers should focus upon?

Jitendra Solanki: If you look at income tax changes, one thing that was introduced in last budget was penalty on ITR filing, now you have to file the same by July 31 every year. If you don’t do that though you have time till March 31 but you need to give penalty. If you do it by December 31 then the penalty is Rs 5000 and for March 31 it is 10, 000.

Now, if you are filing beyond that then you need to pay interest due and it should be noted that the interest is charged for every late month. Now for filing late, the individual needs to pay the interest due and the respective penalty.

So, it is very important that you pay your taxes on time.

What should those people do who have not filed their tax retrun last year?

Jitendra Solanki: As mentioned earlier, people who did not file ITR last year, they still have time till March 31 but then they need to pay penality of Rs 10, 000 if their income is above Rs 5 lakh, if their income is below Rs 5 lakh then need to pay penalty of Rs 1,000.

What in case an individual has paid an extra tax, will it be refunded?

Jitendra Solanki: It usually happens with the salaried individuals, what happens is when the TDS gets deducted it might be higher than the tax you have to pay. It should be noted that the TDS is deducted by one’s employer on the basis of his or her salary. And mostly employers decide in the month of January over what needs to be done. Now in such scenario, if a salaried individual forgot to submit their investment proof then they end up paying higher tax.

In such cases, what they can do is they can file for refund while filing ITR for the next year and once the process gets through, their excess amount will be credited to their respective account.